Do We Have a Crisis in the High Street?

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Living in the XXI century means entering the realm of globalization, where the so-called “butterfly effect” is especially noticeable; the slightest change caused by a local factor in one of the global companies will inevitably trigger a train of changes within the rest of organizations all over the globe.

Although in most cases, these changes can hardly be regarded as crucial ones, in certain cases, the effects can be quite dramatic, leading to a series of financial failures, which, in their turn, will result in another crisis.

Because of the unreasonable steps undertaken by the UK government in encouraging the small private bank and retail business, a number of High Street banking and retail chains are being closed, which leads to massive increase in unemployment rates and the downfall of the UK economy.

In his article ‘Cable’s fables: High Street not in crisis, insists business secretary Vince Cable’’, Lyons (2013) offers an analysis of his interview with Vince Cable, a business secretary and one of the key authorities on the economical and financial affairs of the UK.

Often regarded as something to be avoided at all costs, a crisis is, in fact, an integral part of economical and financial development. There are theories that attempt at stating the exact amount of time, which a crisis normally takes, as well as classify crises according to their length and severity. For instance, there are banking, international financial, wider economic crises and a range of others.

Finally, the existing economical theories claim that a crisis leads to not only negative, but also positive outcomes, among which the re-interpretation of the state’s financial and economical values, rethinking the state’s political and financial strategy and redefining the state’s priorities must be mentioned.

Moreover, by analyzing the causes of the crisis, as well as its prerequisites and the outcomes, companies can possibly avoid similar experiences in the future.

The issue with the High Street crisis is not that simple, however. Despite the numerous pieces of evidence concerning its destructive effects and the anxious entrepreneurs doing everything possible to get the best of the current deals and wrap up the business activities before the effects of the crisis hit them, the very existence of the crisis has been questioned.

On the one hand, denying the crisis might mean refusing to accept the obvious truth; on the other hand, however, the crisis can possibly be proven a spoof. As the reports say, authorities, Vince Cable among them, believe that the crisis simply does not exist: “In general – and I do not want to minimise the impact on people losing their jobs which is obviously horrific – I don’t think I would describe it as a crisis” (Lyons, 2013).

To Cable’s credit, there are signs that certain retailers manage to fight the crisis efficiently and even start business in such an uncomfortable economical environment. As the recent news shows, though the rates of banks and retail shops closing down the High Street make twenty per day, at least two new banks have been recently opened.

While Cable might underrate the scale of the economical and financial problems, which the entire world seems to be gripped by, his arguments are rather valid.

The fact that people lose jobs very easily alone cannot prove the existence and development of a global crisis. While the unemployment rates are increasing, the financial aspect remains rather stable, which means that the current state of affairs might be considered from a less radical point of view.

Unfortunately, most evidence concerning the current financial state of affairs points at the fact that the crisis still exists and that more and more chains of services go bankrupt. To make the matters worse, the entire High Street business seems to have ceased to exist.

To analyze the issue in question, as well as offer prognoses concerning the further economical development of the state, one will have to consider the causes of the High Street crisis. To some extent, the owners of the banks and shops have to be blamed for their failure.

As Mathew explains, Mike Jervis, a retail specialist at PwC, claims that in most of the cases of High Street shops bankruptcy, the owners overrated their business skills by creating too large chains and showing too little entrepreneurial activity together with a very scarce and rather poor analysis of the market (Mathew, 2013).

However, the situation with the High Street banks and shops can also be viewed as a result of extremely poor leadership strategies having been put to work.

One of the possible solutions to the High Street crisis, which is still an issue in the United Kingdom and whose destructive activities still continue to ruin the realm of the British entrepreneurship and is a major obstacle to all kinds of private business initiatives, is a change of the leadership strategy.

Taking a closer look at the current leadership strategy, which still remains the most popular means to exercise the control over smaller businesses, one can spot the inconsistencies and offer a more efficient manner of leading the High Street banks and shops.

It seems that over the past few years, the key strategies that the major banks and shops used to control smaller ones can be referred to as laissez-faire, i.e., the greater businesses offered the smaller ones much more space for their operations than these smaller enterprises actually needed.

Therefore, being handed too much freedom and taking the entire attention of the state, the media and the clientele, the smaller retail sectors and less trustworthy banks managed to put the entire High Street out of business.

Though laissez-faire leadership style is typically considered a relatively good one, since it does not presuppose putting much pressure on the subordinates (Barman, 2009), it also prevents from taking control over the less influential rivals, which is exactly why the High Street banks and retail shops have failed to fight the crisis back.

Moreover, it is necessary to stress that a number of signs have been pointing to the possibility of a global crisis breaking out. A close consideration of these sigs could have helped prevent the deplorable state of affairs that the Western world is currently in; therefore, the least that one can do now it to consider the prerequisites of the High Street crisis in order to avoid similar instances in the future.

When it comes to considering the pivoting point at which the High Street decline started, one will see inevitably that tracking back the reasons is not that easy.

As Sky News report, “A combination of factors – from the consumer spending squeeze to poor business models – is being blamed” (Sky News, 2013); however, this is as far as the research gets. In hard attempts to unbundle the tie of problems, which the High Street has had to face, the authorities are simply unable to define what the current problems have started from.

Like any other crisis, the High Street problem is not going to vanish without a trace. Supposedly, the crisis is going to be dealt with quite soon; however, its aftermath will still have a great effect on the world economy. Since the HIGH Street chains of stores and supermarkets are closing down, a steep rise in unemployment rates is expected.

In their turn, high unemployment rates are going to cause people’s anxiety concerning their own safety, as well as the safety of their investments. As a result, people might withdraw investments from their bank accounts to invest their money into something more stable. Hence, the fall of the state currency becomes a rather tangible threat, together with serious issues in currency exchange sphere.

The above-mentioned chain of events is likely to lead to United Kingdom losing its authority and, therefore, becoming a less influential state. The given change will, doubtlessly result in the change of the government policies and even worse financial state of affairs. Even though the given prognosis is extremely gloomy, the changes of such kind are anticipated, according to what the recent news says.

Even though, as it has been mentioned above, crises are a natural and inevitable element of economic development and that every crisis will someday be followed by another stage of economic growth, it is highly advisable that the UK government should take the matters in their own hands and consider the possible ways of cutting the corners to boosting the economical development.

At present, there are many ways to improve the current state of affairs, including the changes in the foreign and domestic policy, state economics and financial affairs. Nevertheless, not all of these steps can be considered reasonable and, which is even more important, long-lasting.

There is no need to stress the importance of searching for the solution to the current crisis. The apprehension that the mass media spreads in the United Kingdom might be considered a touch far-fetched, yet there are undeniable pieces of evidence to the regress of the UK economics due to the effects that the given crisis is going to have on the United Kingdom. At present, slight changes in the current economic policy can be suggested.

According to Sunderland (2010), the chance for the Great Britain to re-launch the High Street chain efficiently is to introduce bonus structures so that the central banks could take control over less trustworthy “bubbles” once again and reclaim their position in the modern business environment: “High on the agenda is reform of “warped” bonus structures with the aim of “making banking boring once more” (Sunderland, 2010).

Therefore, it can be concluded that Lyons’s article offers a very harsh yet well-justified perspective on what awaits the United Kingdom unless the proper leadership strategies are designed to restore the High Street banks and retail shops, at the same time providing the foil from smaller enterprises to develop.

Though Lyons does not offer many comments on what Cable says, it still has a very strong and long-lasting impact on the reader. The key reason for the article to stay in mind for so long is that Lyons uses his commentaries very wisely.

For example, the article opens with a shocking statistics concerning 20,000 people losing their jobs due to the HIGH Street crisis, which is immediately followed by Cable’s optimistic “The High Street is not in “crisis” despite the collapse of big-name shop chains, Business Secretary Vince Cable insisted today” (Lyons, 2013).

Therefore, it can be concluded that the High Street is not only facing crisis at the moment, but also has suffered a considerable amount of the crisis consequences, in contrast to what Cable says.

In fact, Lyons (2013) makes it very clear that Cable’s statement is far from being trustworthy; every single element in the article, starting from the sarcastic “Cable fables” rhyme to the acid commentaries to Cable’s quotes, almost screams about it.

It might be argued, however, that the article also has its flaws; for example, it is clear that Lyons (2013) could have done better than merely providing the readers excerpts from Cable’s speech and supplying his color commentaries to these quotes.

However, the given approach can be considered a stylistic approach that helps get the satirical tone of the article across and open the readers’ eyes on what is happening in the High Street. To Lyons’s credit, he succeeds in this task.

Because of the crisis, a number of banks have gone bankrupt, and the threat of an economic catastrophe has shaken entire Europe. Though one might argue that the bank owners were to blame for their own misfortune, the consequences are still very real, with people losing their jobs, banks going out of business and sterling dropping to the unspeakable $ 1.51 in February (Inman, 2013).

High Street crisis is real, and the best thing that people can do is acknowledge its existence and start searching for the solutions. An important lesson in currency exchange business, this experience has definitely left a mark on the UK economy.

Reference List

Barman, K. 2009, Leadership management: achieving breakthroughs, Global India Publications, New Delhi.

Inman, P. 2013, ‘Pound falls to two-year low as currency markets lose faith in UK economy’, Guardian. Web.

Lyons, J. 2013, ‘Cable’s fables: High Street not in crisis, insists business secretary Vince Cable’, Mirror Money. Web.

Mathew, J. 2013, ‘High Street in crisis – but two new pound shops open every week’, International Business Times. Web.

Sky News 2013, ‘High Street crisis: chain closures accelerating’, SkyNews. Web.

Sunderland, R. 2010, ‘Crisis economics: a crash course in the future of finance by Nouriel Roubini and Stephen Mihm’. Web.

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Do We Have a Crisis in the High Street?

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